Financial transactions such as loans are often complex and require compliance with many rules, regulations, policies, guidelines, etc. that are established by entities such as regulators, investors, and insurers/guarantors. In situations where a borrower is unable to make the required payments, alternative arrangements are often sought. For example, with a home mortgage loan, loss mitigation alternatives to avoid foreclosure are often desirable if the mortgage loan is in default.
Such loss mitigation alternatives may include, for example, permanently modifying or restructuring the loan, or offering the borrower a moratorium or other temporary forbearance to give them time to bring the loan current. The various loan workout options may have different rules and regulations established by loan investors such as the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Federal National Mortgage Association (“Fannie Mae”), private investors, etc., as well as rules and regulations of loan guarantors and insurers such as the U.S. Veterans Administration (“VA”), the U.S. Federal Housing Administration (“FHA”), United States Department of Agriculture (“USDA”), private insurers, etc. Moreover, regulators such as the Consumer Financial Protection Bureau (“CFPB”) and the Office of the Comptroller of the Currency (“OCC”) have further rules and regulations for working with borrowers in default, resulting in increased complexity.